Interiors firm Havelock Europa has reported a widening of first half losses as revenue slumped.

The Fife-based AIM-listed firm said that group revenue from continuing operations fell by 16 per cent to £41.2 million in the six months to June, down from £49.2 million a year ago.

As a result the firm reported underlying pre-tax losses of £2.4 million, compared to £1.3 million in 2009.

Reported pre-tax loss came in at £4.6 million, a substantial increase on the £1.8 million figure from a year ago.

The company said that net debt increased to £22.3 million, up from £19.4m, reflecting the losses incurred in the first six months.

Despite the setback the firm said that it was confident that its continued focus on efficiency drive across all group businesses will result in cost saving benefits being seen in 2011.

At the start of this month the firm announced a new chief executive, with Eric Prescott being brought into the top role, replacing the interim chief executive David Hurcomb who has since resigned as a director.

Malcolm Gourlay, chairman, said: "This has been a period of substantial change for the business as we focused on improving and delivering overall efficiency and cost savings to provide us a strong foundation for recovery.

"Our re-financing and cost saving programme has led to non-recurring exceptional costs and further cost reductions are expected in the second half of the year. The benefits of these initiatives will fully materialise in 2011."

Gourlay added: "The board believes that its cost saving and efficiency programmes will deliver solid benefits in the future and that this, coupled with the resolution of last year's operational difficulties, lays the foundation for a return to profitability."